U(D54G1D)y+$!#!\!=!$

Residents of the isolated MosquitoCoast of Honduras have burned downgovernment buildings and are demand-ing that American drug agents leave thearea immediately. PAGE A5

INTERNATIONAL A4-14

Anger Rises After Drug SweepThe Senate voted to confirm two nomi-nees for the Federal Reserve Board ofGovernors, overcoming Republican ob-jections and bringing the seven-mem-ber board to full strength for the firsttime since 2006. PAGE B3

BUSINESS DAY B1-9

Senate Clears Fed Nominees

David Brooks PAGE A31

EDITORIAL, OP-ED A30-31

If the movies that win acclaim atFrance’s Cannes Film Festival have lit-tle impact on the box office, they remaininfluential, and for good reason. PAGE C1

WEEKEND C1-32

The True Stars at Cannes

Robert F. Kennedy Jr. said his es-tranged wife had “a lot of agony” in herlife. She had been suffering from alco-holism and depression. PAGE A25

NEW YORK A24-28

Mary Kennedy Is Mourned Wal-Mart suggested in a regulatory fil-ing that the scope of an internal investi-gation into bribery accusations had wid-ened beyond the huge retailer’s subsid-iary in Mexico. PAGE B1

Bribery Case May Widen

A month before his planned walk acrossNiagara Falls, Nik Wallenda, a descend-

ant of the FlyingWallendas familyof circus perform-ers, practices inthe town twice aday, across thestreet from a mini-mart, with dozensof onlookers and ahot dog stand near-by. PAGE A24

Already a Crowd Pleaser

Police tried frantically to save TrayvonMartin after he was shot by a neighbor-hood watch volunteer, documents re-leased in the case show. PAGE A16

Details Released in Killing

A jury began deliberating the fate of theformer presidential candidate John Ed-wards. His lawyer argued that he com-mitted a wrong, but did not commit acrime. PAGE A16

NATIONAL A16-22

Edwards Case in Jury’s Hands

VOL. CLXI . . No. 55,775 © 2012 The New York Times NEW YORK, FRIDAY, MAY 18, 2012

Late EditionToday, an abundance of sun, nice,high 73. Tonight, clear, cool onceagain, low 53. Tomorrow, plenty ofsunshine, pleasant, a bit warmer,high 79. Weather map, Page B16.

$2.50

Win or lose, JohnTortorella of theRangers conductspostgame newsconferences thatare short — onelasted 16 seconds— antagonistic andinvariably devoidof revealing re-sponses. PAGE B13

SPORTSFRIDAY B10-16

A Coach of Few Words

A RICH START Facebook sold 421million shares for $38 each, rais-ing $16 billion and valuing thecompany at $104 billion. PAGE B1

By SOMINI SENGUPTA

MENLO PARK, Calif. —Wealth is here if you know whereto find it.

Fabulous home theaters aretucked into the basements ofplain suburban houses. Bespokejeans that start at $1,200 can bedetected only by a tiny red logoon the button. The hand-paintedItalian bicycles that flash acrossSilicon Valley on Saturday morn-ings have become the new Ferra-ri — and only the cognoscenticould imagine that they costmore than $20,000.

Even at Facebook, ground zerofor the nouveau tech riche, peerpressure dictates that consump-tion be kept on the down low.

“The message here is, ‘Keepshipping product,’” said a Face-book executive who requestedanonymity while discussing in-ternal matters. “If someone buysa fancy car and posts a picture ofit, they get ridiculed and berat-ed.”

The company disclosed onThursday that on the eve of itsstock market debut it was invit-ing employees to a hackathon, or

Preferred Style:Don’t Flaunt ItIn Silicon Valley

Continued on Page B7

PHILADELPHIA — TheBarnes Foundation’s move fromsuburban Philadelphia to the cen-ter of the city caused art loverslots of worry.

Devotees of this great polyglotcollection, heavy withRenoir, Cézanne andMatisse, which theomnivore art shopperAlbert C. Barnesamassed between 1912and his death in 1951,

were appalled by the idea.Barnes spent years obsessivelyarranging his installation cheek-by-jowl in the mansion in LowerMerion, Pa., that he built for thepurpose and opened in 1925, andhe stipulated that, after he died, itshould remain exactly as it was.

In 2002 the foundation’s board— constrained by limits on at-

tendance and public hours im-posed by zoning restrictions —announced plans to relocate.Many people, including a groupthat sued to stop the move, weresure that it could only desecratethis singular institution.

Others, myself included, didnot object to the move per se, butfelt that faithfully reproducingthe old Barnes in the new space,as promised by the trustees, wasa terrible idea. To us it seemedtime to at least loosen upBarnes’s straitjacketed displays,wonderful as they often were.And why go to the trouble of mov-ing the collection to a more acces-sible location when the gallerieswere not going to be any bigger?

And yet the new Barnes provesall of us wrong. Against all odds,

A Museum, Reborn, RemainsTrue to Its Old Self, Only Better

FRED R. CONRAD/THE NEW YORK TIMES

The new Barnes Foundation, in a new shell in Philadelphia.

Continued on Page A18

ROBERTASMITH

ARTREVIEW

DONNA SUMMER, 1948-2012

By JON PARELES

Donna Summer, the multi-million-selling singer and song-writer whose hits captured boththe giddy hedonism of the 1970sdisco era and the feisty femalesolidarity of the early 1980s, diedon Thursday at her home in Na-ples, Fla. She was 63.

The cause was cancer, her pub-licist, Brian Edwards, said.

With her doe eyes, cascade ofhair and sinuous dance moves,Ms. Summer became the queenof disco — the music’s glamorouspublic face — as well as an idolwith a substantial gay following.Her voice, airy and ethereal orbrightly assertive, sailed overdance floors and leapt from ra-dios from the mid-’70s well intothe ’80s.

She riffled through styles as di-verse as funk, electronica, rockand torch song as she piled up 14Top 10 singles in the UnitedStates, among them “Love toLove You Baby,” “Bad Girls,”“Hot Stuff,” “Last Dance” and

“She Works Hard for the Money.”In the late ’70s she had three dou-ble albums in a row that reachedNo. 1, and each sold more than amillion copies.

Her combination of a church-rooted voice and up-to-the-minute dance beats was a tem-plate for 1970s disco, and, withher producers Giorgio Moroderand Pete Bellotte, she pioneeredelectronic dance music with thesynthesizer pulse of “I FeelLove” in 1977, a sound that per-vades 21st-century pop. Her ownrecordings have been sampledby, among others, Beyoncé, thePet Shop Boys, Justice and Nas.

Ms. Summer won GrammyAwards for dance music, R&B,rock and gospel. Her recordedcatalog spans the orgasmicmoans of her first hit, “Love to

The Queen of Disco, Who Transcended the Era

MICHAEL OCHS ARCHIVES/GETTY IMAGES

Donna Summer in 1978.

Continued on Page A23

DADO RUVIC/REUTERS

Mejra Dzogaz, who lost her husband, three sons and a grandson to the 1995 Srebrenica massacre, in Potocari, Bosnia. In TheHague, it was Day 2 of the genocide trial of Ratko Mladic, who led the military unit that carried out the massacre. Page A12.

Remembering a Horror

By JIM RUTENBERGand JEFF ZELENY

Joe Ricketts, an up-by-the-bootstraps billionaire whose var-ied holdings include a name-brand brokerage firm in Omaha,a baseball team in Chicago, herdsof bison in Wyoming and a start-up news Web site in New York,wanted to be a player in the 2012election. On Thursday he was,though not in the way he had in-tended.

Word that Mr. Ricketts hadconsidered bankrolling a $10 mil-lion advertising campaign linkingPresident Obama to the incendi-ary race-infused statements ofhis former pastor, the Rev. Jere-miah A. Wright Jr., broughtwaves of denunciation from MittRomney, the Obama campaignand much of the rest of the politi-cal world.

Highlighting the perils of mix-ing partisan politics and corpo-rate citizenship, the reverbera-

Magnate StepsInto 2012 Fray On Wild Pitch

Continued on Page A20

By C. J. CHIVERS

FORT CAMPBELL, Ky. — Tothose unfamiliar with a battle-field’s bleak routine, Col. MichaelD. Wirt’s database could be readlike a catalog of horrors. In it,more than 500 American soldiersare subjected to characteristicforms of violence of the Afghanwar.

Faces are smacked with shrap-nel, legs are blasted away nearknees, bullets pass throughyoung men’s abdomens. Vehiclesroll over, crushing bones. Ear-drums rupture. Digits are sev-ered.

Dozens of soldiers die. Hun-dreds more begin journeys home,sometimes to treatment that willlast the rest of their lives.

Each was listed in a small butmeticulous computer entry byColonel Wirt, a doctor intent ondocumenting how soldiers werewounded or sickened, how theywere treated and how they fared.For those seeking to understandwar and how best to survive it,the doctor on his own initiativecreated an evidence-based tooland a possible model.

His database is one part of avast store of information re-corded about the experiences ofAmerican combatants. But thereare concerns that the potentiallessons from such data could belost, because no one has yetbrought the information togetherand made it fully cohere.

Colonel Wirt was a brigade sur-geon from the 101st Airborne Di-vision during the American-ledeffort in 2010 and 2011 to dislodgethe Taliban from their ruralstronghold along the ArghandabRiver. His database was part offi-cial record, part personal re-search project.

His commander required himto keep tabs on ailing and wound-ed soldiers, and to inform him oftheir prognosis and whereaboutsin the medical system.

To this, Colonel Wirt added lay-ers of information. He document-ed which weapons caused whichwounds. He tried to record in-creased or decreased risk factors— whether the victim was wear-ing larger or smaller body armor,whether a bomb-sniffing dog waspresent, when a tourniquet wasapplied.

He recorded which accidents

and diseases took which soldiersoff duty, and for how long. Hemapped where on a human bodybullets most often struck.

A year after he returned to thestates, Colonel Wirt and his data-base point to the promise and ob-stacles related to studying morethan a decade of American war.

The amassed information oncombatants over 10 yearsamounts to the most detailed

Cataloging Wounds of War to Help Heal Them

Continued on Page A3

By DAVID BARBOZA and SHARON LaFRANIERE

SHANGHAI — The Hollywoodstudio DreamWorks Animationrecently announced a bold moveto crack China’s tightly protectedfilm industry: a $330 million dealto create a Shanghai animationstudio that might one day rivalthe California shops that turn outhits like “Kung Fu Panda” and“The Incredibles.”

What DreamWorks did notshowcase, however, was one ofits newest — and most important— Chinese partners: Jiang Mian-heng, the 61-year-old son of JiangZemin, the former CommunistParty leader and the most power-ful political kingmaker of China’slast two decades.

The younger Mr. Jiang’s coupshave included ventures withMicrosoft and Nokia and over-sight of a clutch of state-backedinvestment vehicles that havemajor interests in telecommuni-cations, semiconductors and con-struction projects.

That a dealmaker like Mr.Jiang would be included in an un-dertaking like that of Dream-Works is almost a given in to-day’s China. Analysts say this ishow the Communist Party sharesthe spoils, allowing the relativesof senior leaders to cash in on oneof the biggest economic booms inhistory.

As the scandal over Bo Xilaicontinues to reverberate, the au-thorities here are eager to paintMr. Bo, a fallen leader who wasone of 25 members of China’s rul-ing Politburo, as a rogue operator

who abused his power, even ashis family members accumulateda substantial fortune.

But evidence is mounting thatthe relatives of other current andformer senior officials have alsoamassed vast wealth, often play-ing central roles in businessesclosely entwined with the state,including those involved in fi-nance, energy, domestic security,telecommunications and enter-tainment. Many of these so-calledprincelings also serve as middle-men to a host of global companiesand wealthy tycoons eager to dobusiness in China.

“Whenever there is somethingprofitable that emerges in theeconomy, they’ll be at the front ofthe queue,” said Minxin Pei, anexpert on China’s leadership andprofessor of government atClaremont McKenna College inCalifornia. “They’ve gotten intoprivate equity, state-owned en-terprises, natural resources —you name it.”

For example, Wen Yunsong,the son of Prime Minister WenJiabao, heads a state-owned com-pany that boasts that it will soonbe Asia’s largest satellite commu-nications operator. President HuJintao’s son, Hu Haifeng, oncemanaged a state-controlled firmthat held a monopoly on securityscanners used in China’s air-ports, shipping ports and subwaystations. And in 2006, Feng Shao-dong, the son-in-law of Wu Bang-guo, the party’s second-ranking

China ‘Princelings’ UsingFamily Ties to Gain Riches

Leaders’ Relatives Take Key Business Posts— Spoils System Poses Risk to Party

Continued on Page A14

C M Y K Nxxx,2012-05-18,A,001,Bs-BK,E3

SHANGHAI

THe Hollywood studio DreamWorks Ani-mation recently announced a bold move to crack China’s tightly protected film in-

dustry: a $330 million deal to create a Shanghai animation studio that might one day rival the California shops that turn out hits like “Kung Fu Panda” and “The Incredibles.”

What DreamWorks did not showcase, how-ever, was one of its newest — and most impor-tant — Chinese partners: Jiang Mianheng, the 61-year-old son of Jiang Zemin, the former Com-munist Party leader and the most powerful po-litical kingmaker of China’s last two decades.

The younger Mr. Jiang’s coups have in-cluded ventures with Microsoft and Nokia and oversight of a clutch of state-backed investment vehicles that have major interests in telecom-munications, semiconductors and construction projects.

That a dealmaker like Mr. Jiang would be included in an undertaking like that of Dream-Works is almost a given in today’s China. An-alysts say this is how the Communist Party shares the spoils, allowing the relatives of se-nior leaders to cash in on one of the biggest eco-nomic booms in history.

As the scandal over Bo Xilai continues to reverberate, the authorities here are eager to paint Mr. Bo, a fallen leader who was one of 25 members of China’s ruling Politburo, as a rogue operator who abused his power, even as his fam-ily members accumulated a substantial fortune.

But evidence is mounting that the relatives of other current and former senior officials have also amassed vast wealth, often playing central roles in businesses closely entwined with the state, including those involved in finance, ener-gy, domestic security, telecommunications and entertainment. Many of these so-called prince-lings also serve as middlemen to a host of glob-al companies and wealthy tycoons eager to do business in China.

“Whenever there is something profitable that emerges in the economy, they’ll be at the front of the queue,” said Minxin Pei, an expert on China’s leadership and professor of govern-ment at Claremont McKenna College in Califor-nia. “They’ve gotten into private equity, state-owned enterprises, natural resources — you name it.”

For example, Wen Yunsong, the son of Prime Minister Wen Jiabao, heads a state-owned company that boasts that it will soon be Asia’s largest satellite communications opera-tor. President Hu Jintao’s son, Hu Haifeng, once managed a state-controlled firm that held a mo-nopoly on security scanners used in China’s air-ports, shipping ports and subway stations. And in 2006, Feng Shaodong, the son-in-law of Wu Bangguo, the party’s second-ranking official, helped Merrill Lynch win a deal to arrange the $22 billion public listing of the giant state-run bank I.C.B.C., in what became the world’s larg-est initial public stock offering.

Much of the income earned by families of

By DAVID BARBOZA and SHARON LaFRANIERE

U(D54G1D)y+$!#!\!=!$

Residents of the isolated MosquitoCoast of Honduras have burned downgovernment buildings and are demand-ing that American drug agents leave thearea immediately. PAGE A5

INTERNATIONAL A4-14

Anger Rises After Drug SweepThe Senate voted to confirm two nomi-nees for the Federal Reserve Board ofGovernors, overcoming Republican ob-jections and bringing the seven-mem-ber board to full strength for the firsttime since 2006. PAGE B3

BUSINESS DAY B1-9

Senate Clears Fed Nominees

David Brooks PAGE A31

EDITORIAL, OP-ED A30-31

If the movies that win acclaim atFrance’s Cannes Film Festival have lit-tle impact on the box office, they remaininfluential, and for good reason. PAGE C1

WEEKEND C1-32

The True Stars at Cannes

Robert F. Kennedy Jr. said his es-tranged wife had “a lot of agony” in herlife. She had been suffering from alco-holism and depression. PAGE A25

NEW YORK A24-28

Mary Kennedy Is Mourned Wal-Mart suggested in a regulatory fil-ing that the scope of an internal investi-gation into bribery accusations had wid-ened beyond the huge retailer’s subsid-iary in Mexico. PAGE B1

Bribery Case May Widen

A month before his planned walk acrossNiagara Falls, Nik Wallenda, a descend-

ant of the FlyingWallendas familyof circus perform-ers, practices inthe town twice aday, across thestreet from a mini-mart, with dozensof onlookers and ahot dog stand near-by. PAGE A24

Already a Crowd Pleaser

Police tried frantically to save TrayvonMartin after he was shot by a neighbor-hood watch volunteer, documents re-leased in the case show. PAGE A16

Details Released in Killing

A jury began deliberating the fate of theformer presidential candidate John Ed-wards. His lawyer argued that he com-mitted a wrong, but did not commit acrime. PAGE A16

NATIONAL A16-22

Edwards Case in Jury’s Hands

VOL. CLXI . . No. 55,775 © 2012 The New York Times NEW YORK, FRIDAY, MAY 18, 2012

Late EditionToday, an abundance of sun, nice,high 73. Tonight, clear, cool onceagain, low 53. Tomorrow, plenty ofsunshine, pleasant, a bit warmer,high 79. Weather map, Page B16.

$2.50

Win or lose, JohnTortorella of theRangers conductspostgame newsconferences thatare short — onelasted 16 seconds— antagonistic andinvariably devoidof revealing re-sponses. PAGE B13

SPORTSFRIDAY B10-16

A Coach of Few Words

A RICH START Facebook sold 421million shares for $38 each, rais-ing $16 billion and valuing thecompany at $104 billion. PAGE B1

By SOMINI SENGUPTA

MENLO PARK, Calif. —Wealth is here if you know whereto find it.

Fabulous home theaters aretucked into the basements ofplain suburban houses. Bespokejeans that start at $1,200 can bedetected only by a tiny red logoon the button. The hand-paintedItalian bicycles that flash acrossSilicon Valley on Saturday morn-ings have become the new Ferra-ri — and only the cognoscenticould imagine that they costmore than $20,000.

Even at Facebook, ground zerofor the nouveau tech riche, peerpressure dictates that consump-tion be kept on the down low.

“The message here is, ‘Keepshipping product,’” said a Face-book executive who requestedanonymity while discussing in-ternal matters. “If someone buysa fancy car and posts a picture ofit, they get ridiculed and berat-ed.”

The company disclosed onThursday that on the eve of itsstock market debut it was invit-ing employees to a hackathon, or

Preferred Style:Don’t Flaunt ItIn Silicon Valley

Continued on Page B7

PHILADELPHIA — TheBarnes Foundation’s move fromsuburban Philadelphia to the cen-ter of the city caused art loverslots of worry.

Devotees of this great polyglotcollection, heavy withRenoir, Cézanne andMatisse, which theomnivore art shopperAlbert C. Barnesamassed between 1912and his death in 1951,

were appalled by the idea.Barnes spent years obsessivelyarranging his installation cheek-by-jowl in the mansion in LowerMerion, Pa., that he built for thepurpose and opened in 1925, andhe stipulated that, after he died, itshould remain exactly as it was.

In 2002 the foundation’s board— constrained by limits on at-

tendance and public hours im-posed by zoning restrictions —announced plans to relocate.Many people, including a groupthat sued to stop the move, weresure that it could only desecratethis singular institution.

Others, myself included, didnot object to the move per se, butfelt that faithfully reproducingthe old Barnes in the new space,as promised by the trustees, wasa terrible idea. To us it seemedtime to at least loosen upBarnes’s straitjacketed displays,wonderful as they often were.And why go to the trouble of mov-ing the collection to a more acces-sible location when the gallerieswere not going to be any bigger?

And yet the new Barnes provesall of us wrong. Against all odds,

A Museum, Reborn, RemainsTrue to Its Old Self, Only Better

FRED R. CONRAD/THE NEW YORK TIMES

The new Barnes Foundation, in a new shell in Philadelphia.

Continued on Page A18

ROBERTASMITH

ARTREVIEW

DONNA SUMMER, 1948-2012

By JON PARELES

Donna Summer, the multi-million-selling singer and song-writer whose hits captured boththe giddy hedonism of the 1970sdisco era and the feisty femalesolidarity of the early 1980s, diedon Thursday at her home in Na-ples, Fla. She was 63.

The cause was cancer, her pub-licist, Brian Edwards, said.

With her doe eyes, cascade ofhair and sinuous dance moves,Ms. Summer became the queenof disco — the music’s glamorouspublic face — as well as an idolwith a substantial gay following.Her voice, airy and ethereal orbrightly assertive, sailed overdance floors and leapt from ra-dios from the mid-’70s well intothe ’80s.

She riffled through styles as di-verse as funk, electronica, rockand torch song as she piled up 14Top 10 singles in the UnitedStates, among them “Love toLove You Baby,” “Bad Girls,”“Hot Stuff,” “Last Dance” and

“She Works Hard for the Money.”In the late ’70s she had three dou-ble albums in a row that reachedNo. 1, and each sold more than amillion copies.

Her combination of a church-rooted voice and up-to-the-minute dance beats was a tem-plate for 1970s disco, and, withher producers Giorgio Moroderand Pete Bellotte, she pioneeredelectronic dance music with thesynthesizer pulse of “I FeelLove” in 1977, a sound that per-vades 21st-century pop. Her ownrecordings have been sampledby, among others, Beyoncé, thePet Shop Boys, Justice and Nas.

Ms. Summer won GrammyAwards for dance music, R&B,rock and gospel. Her recordedcatalog spans the orgasmicmoans of her first hit, “Love to

The Queen of Disco, Who Transcended the Era

MICHAEL OCHS ARCHIVES/GETTY IMAGES

Donna Summer in 1978.

Continued on Page A23

DADO RUVIC/REUTERS

Mejra Dzogaz, who lost her husband, three sons and a grandson to the 1995 Srebrenica massacre, in Potocari, Bosnia. In TheHague, it was Day 2 of the genocide trial of Ratko Mladic, who led the military unit that carried out the massacre. Page A12.

Remembering a Horror

By JIM RUTENBERGand JEFF ZELENY

Joe Ricketts, an up-by-the-bootstraps billionaire whose var-ied holdings include a name-brand brokerage firm in Omaha,a baseball team in Chicago, herdsof bison in Wyoming and a start-up news Web site in New York,wanted to be a player in the 2012election. On Thursday he was,though not in the way he had in-tended.

Word that Mr. Ricketts hadconsidered bankrolling a $10 mil-lion advertising campaign linkingPresident Obama to the incendi-ary race-infused statements ofhis former pastor, the Rev. Jere-miah A. Wright Jr., broughtwaves of denunciation from MittRomney, the Obama campaignand much of the rest of the politi-cal world.

Highlighting the perils of mix-ing partisan politics and corpo-rate citizenship, the reverbera-

Magnate StepsInto 2012 Fray On Wild Pitch

Continued on Page A20

By C. J. CHIVERS

FORT CAMPBELL, Ky. — Tothose unfamiliar with a battle-field’s bleak routine, Col. MichaelD. Wirt’s database could be readlike a catalog of horrors. In it,more than 500 American soldiersare subjected to characteristicforms of violence of the Afghanwar.

Faces are smacked with shrap-nel, legs are blasted away nearknees, bullets pass throughyoung men’s abdomens. Vehiclesroll over, crushing bones. Ear-drums rupture. Digits are sev-ered.

Dozens of soldiers die. Hun-dreds more begin journeys home,sometimes to treatment that willlast the rest of their lives.

Each was listed in a small butmeticulous computer entry byColonel Wirt, a doctor intent ondocumenting how soldiers werewounded or sickened, how theywere treated and how they fared.For those seeking to understandwar and how best to survive it,the doctor on his own initiativecreated an evidence-based tooland a possible model.

His database is one part of avast store of information re-corded about the experiences ofAmerican combatants. But thereare concerns that the potentiallessons from such data could belost, because no one has yetbrought the information togetherand made it fully cohere.

Colonel Wirt was a brigade sur-geon from the 101st Airborne Di-vision during the American-ledeffort in 2010 and 2011 to dislodgethe Taliban from their ruralstronghold along the ArghandabRiver. His database was part offi-cial record, part personal re-search project.

His commander required himto keep tabs on ailing and wound-ed soldiers, and to inform him oftheir prognosis and whereaboutsin the medical system.

To this, Colonel Wirt added lay-ers of information. He document-ed which weapons caused whichwounds. He tried to record in-creased or decreased risk factors— whether the victim was wear-ing larger or smaller body armor,whether a bomb-sniffing dog waspresent, when a tourniquet wasapplied.

He recorded which accidents

and diseases took which soldiersoff duty, and for how long. Hemapped where on a human bodybullets most often struck.

A year after he returned to thestates, Colonel Wirt and his data-base point to the promise and ob-stacles related to studying morethan a decade of American war.

The amassed information oncombatants over 10 yearsamounts to the most detailed

Cataloging Wounds of War to Help Heal Them

Continued on Page A3

By DAVID BARBOZA and SHARON LaFRANIERE

SHANGHAI — The Hollywoodstudio DreamWorks Animationrecently announced a bold moveto crack China’s tightly protectedfilm industry: a $330 million dealto create a Shanghai animationstudio that might one day rivalthe California shops that turn outhits like “Kung Fu Panda” and“The Incredibles.”

What DreamWorks did notshowcase, however, was one ofits newest — and most important— Chinese partners: Jiang Mian-heng, the 61-year-old son of JiangZemin, the former CommunistParty leader and the most power-ful political kingmaker of China’slast two decades.

The younger Mr. Jiang’s coupshave included ventures withMicrosoft and Nokia and over-sight of a clutch of state-backedinvestment vehicles that havemajor interests in telecommuni-cations, semiconductors and con-struction projects.

That a dealmaker like Mr.Jiang would be included in an un-dertaking like that of Dream-Works is almost a given in to-day’s China. Analysts say this ishow the Communist Party sharesthe spoils, allowing the relativesof senior leaders to cash in on oneof the biggest economic booms inhistory.

As the scandal over Bo Xilaicontinues to reverberate, the au-thorities here are eager to paintMr. Bo, a fallen leader who wasone of 25 members of China’s rul-ing Politburo, as a rogue operator

who abused his power, even ashis family members accumulateda substantial fortune.

But evidence is mounting thatthe relatives of other current andformer senior officials have alsoamassed vast wealth, often play-ing central roles in businessesclosely entwined with the state,including those involved in fi-nance, energy, domestic security,telecommunications and enter-tainment. Many of these so-calledprincelings also serve as middle-men to a host of global companiesand wealthy tycoons eager to dobusiness in China.

“Whenever there is somethingprofitable that emerges in theeconomy, they’ll be at the front ofthe queue,” said Minxin Pei, anexpert on China’s leadership andprofessor of government atClaremont McKenna College inCalifornia. “They’ve gotten intoprivate equity, state-owned en-terprises, natural resources —you name it.”

For example, Wen Yunsong,the son of Prime Minister WenJiabao, heads a state-owned com-pany that boasts that it will soonbe Asia’s largest satellite commu-nications operator. President HuJintao’s son, Hu Haifeng, oncemanaged a state-controlled firmthat held a monopoly on securityscanners used in China’s air-ports, shipping ports and subwaystations. And in 2006, Feng Shao-dong, the son-in-law of Wu Bang-guo, the party’s second-ranking

China ‘Princelings’ UsingFamily Ties to Gain Riches

Leaders’ Relatives Take Key Business Posts— Spoils System Poses Risk to Party

Continued on Page A14

C M Y K Nxxx,2012-05-18,A,001,Bs-BK,E3

U(D54G1D)y+$!#!\!=!$

Residents of the isolated MosquitoCoast of Honduras have burned downgovernment buildings and are demand-ing that American drug agents leave thearea immediately. PAGE A5

INTERNATIONAL A4-14

Anger Rises After Drug SweepThe Senate voted to confirm two nomi-nees for the Federal Reserve Board ofGovernors, overcoming Republican ob-jections and bringing the seven-mem-ber board to full strength for the firsttime since 2006. PAGE B3

BUSINESS DAY B1-9

Senate Clears Fed Nominees

David Brooks PAGE A31

EDITORIAL, OP-ED A30-31

If the movies that win acclaim atFrance’s Cannes Film Festival have lit-tle impact on the box office, they remaininfluential, and for good reason. PAGE C1

WEEKEND C1-32

The True Stars at Cannes

Robert F. Kennedy Jr. said his es-tranged wife had “a lot of agony” in herlife. She had been suffering from alco-holism and depression. PAGE A25

NEW YORK A24-28

Mary Kennedy Is Mourned Wal-Mart suggested in a regulatory fil-ing that the scope of an internal investi-gation into bribery accusations had wid-ened beyond the huge retailer’s subsid-iary in Mexico. PAGE B1

Bribery Case May Widen

A month before his planned walk acrossNiagara Falls, Nik Wallenda, a descend-

ant of the FlyingWallendas familyof circus perform-ers, practices inthe town twice aday, across thestreet from a mini-mart, with dozensof onlookers and ahot dog stand near-by. PAGE A24

Already a Crowd Pleaser

Police tried frantically to save TrayvonMartin after he was shot by a neighbor-hood watch volunteer, documents re-leased in the case show. PAGE A16

Details Released in Killing

A jury began deliberating the fate of theformer presidential candidate John Ed-wards. His lawyer argued that he com-mitted a wrong, but did not commit acrime. PAGE A16

NATIONAL A16-22

Edwards Case in Jury’s Hands

VOL. CLXI . . No. 55,775 © 2012 The New York Times NEW YORK, FRIDAY, MAY 18, 2012

Late EditionToday, an abundance of sun, nice,high 73. Tonight, clear, cool onceagain, low 53. Tomorrow, plenty ofsunshine, pleasant, a bit warmer,high 79. Weather map, Page B16.

$2.50

Win or lose, JohnTortorella of theRangers conductspostgame newsconferences thatare short — onelasted 16 seconds— antagonistic andinvariably devoidof revealing re-sponses. PAGE B13

SPORTSFRIDAY B10-16

A Coach of Few Words

A RICH START Facebook sold 421million shares for $38 each, rais-ing $16 billion and valuing thecompany at $104 billion. PAGE B1

By SOMINI SENGUPTA

MENLO PARK, Calif. —Wealth is here if you know whereto find it.

Fabulous home theaters aretucked into the basements ofplain suburban houses. Bespokejeans that start at $1,200 can bedetected only by a tiny red logoon the button. The hand-paintedItalian bicycles that flash acrossSilicon Valley on Saturday morn-ings have become the new Ferra-ri — and only the cognoscenticould imagine that they costmore than $20,000.

Even at Facebook, ground zerofor the nouveau tech riche, peerpressure dictates that consump-tion be kept on the down low.

“The message here is, ‘Keepshipping product,’” said a Face-book executive who requestedanonymity while discussing in-ternal matters. “If someone buysa fancy car and posts a picture ofit, they get ridiculed and berat-ed.”

The company disclosed onThursday that on the eve of itsstock market debut it was invit-ing employees to a hackathon, or

Preferred Style:Don’t Flaunt ItIn Silicon Valley

Continued on Page B7

PHILADELPHIA — TheBarnes Foundation’s move fromsuburban Philadelphia to the cen-ter of the city caused art loverslots of worry.

Devotees of this great polyglotcollection, heavy withRenoir, Cézanne andMatisse, which theomnivore art shopperAlbert C. Barnesamassed between 1912and his death in 1951,

were appalled by the idea.Barnes spent years obsessivelyarranging his installation cheek-by-jowl in the mansion in LowerMerion, Pa., that he built for thepurpose and opened in 1925, andhe stipulated that, after he died, itshould remain exactly as it was.

In 2002 the foundation’s board— constrained by limits on at-

tendance and public hours im-posed by zoning restrictions —announced plans to relocate.Many people, including a groupthat sued to stop the move, weresure that it could only desecratethis singular institution.

Others, myself included, didnot object to the move per se, butfelt that faithfully reproducingthe old Barnes in the new space,as promised by the trustees, wasa terrible idea. To us it seemedtime to at least loosen upBarnes’s straitjacketed displays,wonderful as they often were.And why go to the trouble of mov-ing the collection to a more acces-sible location when the gallerieswere not going to be any bigger?

And yet the new Barnes provesall of us wrong. Against all odds,

A Museum, Reborn, RemainsTrue to Its Old Self, Only Better

FRED R. CONRAD/THE NEW YORK TIMES

The new Barnes Foundation, in a new shell in Philadelphia.

Continued on Page A18

ROBERTASMITH

ARTREVIEW

DONNA SUMMER, 1948-2012

By JON PARELES

Donna Summer, the multi-million-selling singer and song-writer whose hits captured boththe giddy hedonism of the 1970sdisco era and the feisty femalesolidarity of the early 1980s, diedon Thursday at her home in Na-ples, Fla. She was 63.

The cause was cancer, her pub-licist, Brian Edwards, said.

With her doe eyes, cascade ofhair and sinuous dance moves,Ms. Summer became the queenof disco — the music’s glamorouspublic face — as well as an idolwith a substantial gay following.Her voice, airy and ethereal orbrightly assertive, sailed overdance floors and leapt from ra-dios from the mid-’70s well intothe ’80s.

She riffled through styles as di-verse as funk, electronica, rockand torch song as she piled up 14Top 10 singles in the UnitedStates, among them “Love toLove You Baby,” “Bad Girls,”“Hot Stuff,” “Last Dance” and

“She Works Hard for the Money.”In the late ’70s she had three dou-ble albums in a row that reachedNo. 1, and each sold more than amillion copies.

Her combination of a church-rooted voice and up-to-the-minute dance beats was a tem-plate for 1970s disco, and, withher producers Giorgio Moroderand Pete Bellotte, she pioneeredelectronic dance music with thesynthesizer pulse of “I FeelLove” in 1977, a sound that per-vades 21st-century pop. Her ownrecordings have been sampledby, among others, Beyoncé, thePet Shop Boys, Justice and Nas.

Ms. Summer won GrammyAwards for dance music, R&B,rock and gospel. Her recordedcatalog spans the orgasmicmoans of her first hit, “Love to

The Queen of Disco, Who Transcended the Era

MICHAEL OCHS ARCHIVES/GETTY IMAGES

Donna Summer in 1978.

Continued on Page A23

DADO RUVIC/REUTERS

Mejra Dzogaz, who lost her husband, three sons and a grandson to the 1995 Srebrenica massacre, in Potocari, Bosnia. In TheHague, it was Day 2 of the genocide trial of Ratko Mladic, who led the military unit that carried out the massacre. Page A12.

Remembering a Horror

By JIM RUTENBERGand JEFF ZELENY

Joe Ricketts, an up-by-the-bootstraps billionaire whose var-ied holdings include a name-brand brokerage firm in Omaha,a baseball team in Chicago, herdsof bison in Wyoming and a start-up news Web site in New York,wanted to be a player in the 2012election. On Thursday he was,though not in the way he had in-tended.

Word that Mr. Ricketts hadconsidered bankrolling a $10 mil-lion advertising campaign linkingPresident Obama to the incendi-ary race-infused statements ofhis former pastor, the Rev. Jere-miah A. Wright Jr., broughtwaves of denunciation from MittRomney, the Obama campaignand much of the rest of the politi-cal world.

Highlighting the perils of mix-ing partisan politics and corpo-rate citizenship, the reverbera-

Magnate StepsInto 2012 Fray On Wild Pitch

Continued on Page A20

By C. J. CHIVERS

FORT CAMPBELL, Ky. — Tothose unfamiliar with a battle-field’s bleak routine, Col. MichaelD. Wirt’s database could be readlike a catalog of horrors. In it,more than 500 American soldiersare subjected to characteristicforms of violence of the Afghanwar.

Faces are smacked with shrap-nel, legs are blasted away nearknees, bullets pass throughyoung men’s abdomens. Vehiclesroll over, crushing bones. Ear-drums rupture. Digits are sev-ered.

Dozens of soldiers die. Hun-dreds more begin journeys home,sometimes to treatment that willlast the rest of their lives.

Each was listed in a small butmeticulous computer entry byColonel Wirt, a doctor intent ondocumenting how soldiers werewounded or sickened, how theywere treated and how they fared.For those seeking to understandwar and how best to survive it,the doctor on his own initiativecreated an evidence-based tooland a possible model.

His database is one part of avast store of information re-corded about the experiences ofAmerican combatants. But thereare concerns that the potentiallessons from such data could belost, because no one has yetbrought the information togetherand made it fully cohere.

Colonel Wirt was a brigade sur-geon from the 101st Airborne Di-vision during the American-ledeffort in 2010 and 2011 to dislodgethe Taliban from their ruralstronghold along the ArghandabRiver. His database was part offi-cial record, part personal re-search project.

His commander required himto keep tabs on ailing and wound-ed soldiers, and to inform him oftheir prognosis and whereaboutsin the medical system.

To this, Colonel Wirt added lay-ers of information. He document-ed which weapons caused whichwounds. He tried to record in-creased or decreased risk factors— whether the victim was wear-ing larger or smaller body armor,whether a bomb-sniffing dog waspresent, when a tourniquet wasapplied.

He recorded which accidents

and diseases took which soldiersoff duty, and for how long. Hemapped where on a human bodybullets most often struck.

A year after he returned to thestates, Colonel Wirt and his data-base point to the promise and ob-stacles related to studying morethan a decade of American war.

The amassed information oncombatants over 10 yearsamounts to the most detailed

Cataloging Wounds of War to Help Heal Them

Continued on Page A3

By DAVID BARBOZA and SHARON LaFRANIERE

SHANGHAI — The Hollywoodstudio DreamWorks Animationrecently announced a bold moveto crack China’s tightly protectedfilm industry: a $330 million dealto create a Shanghai animationstudio that might one day rivalthe California shops that turn outhits like “Kung Fu Panda” and“The Incredibles.”

What DreamWorks did notshowcase, however, was one ofits newest — and most important— Chinese partners: Jiang Mian-heng, the 61-year-old son of JiangZemin, the former CommunistParty leader and the most power-ful political kingmaker of China’slast two decades.

The younger Mr. Jiang’s coupshave included ventures withMicrosoft and Nokia and over-sight of a clutch of state-backedinvestment vehicles that havemajor interests in telecommuni-cations, semiconductors and con-struction projects.

That a dealmaker like Mr.Jiang would be included in an un-dertaking like that of Dream-Works is almost a given in to-day’s China. Analysts say this ishow the Communist Party sharesthe spoils, allowing the relativesof senior leaders to cash in on oneof the biggest economic booms inhistory.

As the scandal over Bo Xilaicontinues to reverberate, the au-thorities here are eager to paintMr. Bo, a fallen leader who wasone of 25 members of China’s rul-ing Politburo, as a rogue operator

who abused his power, even ashis family members accumulateda substantial fortune.

But evidence is mounting thatthe relatives of other current andformer senior officials have alsoamassed vast wealth, often play-ing central roles in businessesclosely entwined with the state,including those involved in fi-nance, energy, domestic security,telecommunications and enter-tainment. Many of these so-calledprincelings also serve as middle-men to a host of global companiesand wealthy tycoons eager to dobusiness in China.

“Whenever there is somethingprofitable that emerges in theeconomy, they’ll be at the front ofthe queue,” said Minxin Pei, anexpert on China’s leadership andprofessor of government atClaremont McKenna College inCalifornia. “They’ve gotten intoprivate equity, state-owned en-terprises, natural resources —you name it.”

For example, Wen Yunsong,the son of Prime Minister WenJiabao, heads a state-owned com-pany that boasts that it will soonbe Asia’s largest satellite commu-nications operator. President HuJintao’s son, Hu Haifeng, oncemanaged a state-controlled firmthat held a monopoly on securityscanners used in China’s air-ports, shipping ports and subwaystations. And in 2006, Feng Shao-dong, the son-in-law of Wu Bang-guo, the party’s second-ranking

China ‘Princelings’ UsingFamily Ties to Gain Riches

Leaders’ Relatives Take Key Business Posts— Spoils System Poses Risk to Party

Continued on Page A14

C M Y K Nxxx,2012-05-18,A,001,Bs-BK,E3

U(D54G1D)y+$!#!\!=!$

Residents of the isolated MosquitoCoast of Honduras have burned downgovernment buildings and are demand-ing that American drug agents leave thearea immediately. PAGE A5

INTERNATIONAL A4-14

Anger Rises After Drug SweepThe Senate voted to confirm two nomi-nees for the Federal Reserve Board ofGovernors, overcoming Republican ob-jections and bringing the seven-mem-ber board to full strength for the firsttime since 2006. PAGE B3

BUSINESS DAY B1-9

Senate Clears Fed Nominees

David Brooks PAGE A31

EDITORIAL, OP-ED A30-31

If the movies that win acclaim atFrance’s Cannes Film Festival have lit-tle impact on the box office, they remaininfluential, and for good reason. PAGE C1

WEEKEND C1-32

The True Stars at Cannes

Robert F. Kennedy Jr. said his es-tranged wife had “a lot of agony” in herlife. She had been suffering from alco-holism and depression. PAGE A25

NEW YORK A24-28

Mary Kennedy Is Mourned Wal-Mart suggested in a regulatory fil-ing that the scope of an internal investi-gation into bribery accusations had wid-ened beyond the huge retailer’s subsid-iary in Mexico. PAGE B1

Bribery Case May Widen

A month before his planned walk acrossNiagara Falls, Nik Wallenda, a descend-

ant of the FlyingWallendas familyof circus perform-ers, practices inthe town twice aday, across thestreet from a mini-mart, with dozensof onlookers and ahot dog stand near-by. PAGE A24

Already a Crowd Pleaser

Police tried frantically to save TrayvonMartin after he was shot by a neighbor-hood watch volunteer, documents re-leased in the case show. PAGE A16

Details Released in Killing

A jury began deliberating the fate of theformer presidential candidate John Ed-wards. His lawyer argued that he com-mitted a wrong, but did not commit acrime. PAGE A16

NATIONAL A16-22

Edwards Case in Jury’s Hands

VOL. CLXI . . No. 55,775 © 2012 The New York Times NEW YORK, FRIDAY, MAY 18, 2012

Late EditionToday, an abundance of sun, nice,high 73. Tonight, clear, cool onceagain, low 53. Tomorrow, plenty ofsunshine, pleasant, a bit warmer,high 79. Weather map, Page B16.

$2.50

Win or lose, JohnTortorella of theRangers conductspostgame newsconferences thatare short — onelasted 16 seconds— antagonistic andinvariably devoidof revealing re-sponses. PAGE B13

SPORTSFRIDAY B10-16

A Coach of Few Words

A RICH START Facebook sold 421million shares for $38 each, rais-ing $16 billion and valuing thecompany at $104 billion. PAGE B1

By SOMINI SENGUPTA

MENLO PARK, Calif. —Wealth is here if you know whereto find it.

Fabulous home theaters aretucked into the basements ofplain suburban houses. Bespokejeans that start at $1,200 can bedetected only by a tiny red logoon the button. The hand-paintedItalian bicycles that flash acrossSilicon Valley on Saturday morn-ings have become the new Ferra-ri — and only the cognoscenticould imagine that they costmore than $20,000.

Even at Facebook, ground zerofor the nouveau tech riche, peerpressure dictates that consump-tion be kept on the down low.

“The message here is, ‘Keepshipping product,’” said a Face-book executive who requestedanonymity while discussing in-ternal matters. “If someone buysa fancy car and posts a picture ofit, they get ridiculed and berat-ed.”

The company disclosed onThursday that on the eve of itsstock market debut it was invit-ing employees to a hackathon, or

Preferred Style:Don’t Flaunt ItIn Silicon Valley

Continued on Page B7

PHILADELPHIA — TheBarnes Foundation’s move fromsuburban Philadelphia to the cen-ter of the city caused art loverslots of worry.

Devotees of this great polyglotcollection, heavy withRenoir, Cézanne andMatisse, which theomnivore art shopperAlbert C. Barnesamassed between 1912and his death in 1951,

were appalled by the idea.Barnes spent years obsessivelyarranging his installation cheek-by-jowl in the mansion in LowerMerion, Pa., that he built for thepurpose and opened in 1925, andhe stipulated that, after he died, itshould remain exactly as it was.

In 2002 the foundation’s board— constrained by limits on at-

tendance and public hours im-posed by zoning restrictions —announced plans to relocate.Many people, including a groupthat sued to stop the move, weresure that it could only desecratethis singular institution.

Others, myself included, didnot object to the move per se, butfelt that faithfully reproducingthe old Barnes in the new space,as promised by the trustees, wasa terrible idea. To us it seemedtime to at least loosen upBarnes’s straitjacketed displays,wonderful as they often were.And why go to the trouble of mov-ing the collection to a more acces-sible location when the gallerieswere not going to be any bigger?

And yet the new Barnes provesall of us wrong. Against all odds,

A Museum, Reborn, RemainsTrue to Its Old Self, Only Better

FRED R. CONRAD/THE NEW YORK TIMES

The new Barnes Foundation, in a new shell in Philadelphia.

Continued on Page A18

ROBERTASMITH

ARTREVIEW

DONNA SUMMER, 1948-2012

By JON PARELES

Donna Summer, the multi-million-selling singer and song-writer whose hits captured boththe giddy hedonism of the 1970sdisco era and the feisty femalesolidarity of the early 1980s, diedon Thursday at her home in Na-ples, Fla. She was 63.

The cause was cancer, her pub-licist, Brian Edwards, said.

With her doe eyes, cascade ofhair and sinuous dance moves,Ms. Summer became the queenof disco — the music’s glamorouspublic face — as well as an idolwith a substantial gay following.Her voice, airy and ethereal orbrightly assertive, sailed overdance floors and leapt from ra-dios from the mid-’70s well intothe ’80s.

She riffled through styles as di-verse as funk, electronica, rockand torch song as she piled up 14Top 10 singles in the UnitedStates, among them “Love toLove You Baby,” “Bad Girls,”“Hot Stuff,” “Last Dance” and

“She Works Hard for the Money.”In the late ’70s she had three dou-ble albums in a row that reachedNo. 1, and each sold more than amillion copies.

Her combination of a church-rooted voice and up-to-the-minute dance beats was a tem-plate for 1970s disco, and, withher producers Giorgio Moroderand Pete Bellotte, she pioneeredelectronic dance music with thesynthesizer pulse of “I FeelLove” in 1977, a sound that per-vades 21st-century pop. Her ownrecordings have been sampledby, among others, Beyoncé, thePet Shop Boys, Justice and Nas.

Ms. Summer won GrammyAwards for dance music, R&B,rock and gospel. Her recordedcatalog spans the orgasmicmoans of her first hit, “Love to

The Queen of Disco, Who Transcended the Era

MICHAEL OCHS ARCHIVES/GETTY IMAGES

Donna Summer in 1978.

Continued on Page A23

DADO RUVIC/REUTERS

Mejra Dzogaz, who lost her husband, three sons and a grandson to the 1995 Srebrenica massacre, in Potocari, Bosnia. In TheHague, it was Day 2 of the genocide trial of Ratko Mladic, who led the military unit that carried out the massacre. Page A12.

Remembering a Horror

By JIM RUTENBERGand JEFF ZELENY

Joe Ricketts, an up-by-the-bootstraps billionaire whose var-ied holdings include a name-brand brokerage firm in Omaha,a baseball team in Chicago, herdsof bison in Wyoming and a start-up news Web site in New York,wanted to be a player in the 2012election. On Thursday he was,though not in the way he had in-tended.

Word that Mr. Ricketts hadconsidered bankrolling a $10 mil-lion advertising campaign linkingPresident Obama to the incendi-ary race-infused statements ofhis former pastor, the Rev. Jere-miah A. Wright Jr., broughtwaves of denunciation from MittRomney, the Obama campaignand much of the rest of the politi-cal world.

Highlighting the perils of mix-ing partisan politics and corpo-rate citizenship, the reverbera-

Magnate StepsInto 2012 Fray On Wild Pitch

Continued on Page A20

By C. J. CHIVERS

FORT CAMPBELL, Ky. — Tothose unfamiliar with a battle-field’s bleak routine, Col. MichaelD. Wirt’s database could be readlike a catalog of horrors. In it,more than 500 American soldiersare subjected to characteristicforms of violence of the Afghanwar.

Faces are smacked with shrap-nel, legs are blasted away nearknees, bullets pass throughyoung men’s abdomens. Vehiclesroll over, crushing bones. Ear-drums rupture. Digits are sev-ered.

Dozens of soldiers die. Hun-dreds more begin journeys home,sometimes to treatment that willlast the rest of their lives.

Each was listed in a small butmeticulous computer entry byColonel Wirt, a doctor intent ondocumenting how soldiers werewounded or sickened, how theywere treated and how they fared.For those seeking to understandwar and how best to survive it,the doctor on his own initiativecreated an evidence-based tooland a possible model.

His database is one part of avast store of information re-corded about the experiences ofAmerican combatants. But thereare concerns that the potentiallessons from such data could belost, because no one has yetbrought the information togetherand made it fully cohere.

Colonel Wirt was a brigade sur-geon from the 101st Airborne Di-vision during the American-ledeffort in 2010 and 2011 to dislodgethe Taliban from their ruralstronghold along the ArghandabRiver. His database was part offi-cial record, part personal re-search project.

His commander required himto keep tabs on ailing and wound-ed soldiers, and to inform him oftheir prognosis and whereaboutsin the medical system.

To this, Colonel Wirt added lay-ers of information. He document-ed which weapons caused whichwounds. He tried to record in-creased or decreased risk factors— whether the victim was wear-ing larger or smaller body armor,whether a bomb-sniffing dog waspresent, when a tourniquet wasapplied.

He recorded which accidents

and diseases took which soldiersoff duty, and for how long. Hemapped where on a human bodybullets most often struck.

A year after he returned to thestates, Colonel Wirt and his data-base point to the promise and ob-stacles related to studying morethan a decade of American war.

The amassed information oncombatants over 10 yearsamounts to the most detailed

Cataloging Wounds of War to Help Heal Them

Continued on Page A3

By DAVID BARBOZA and SHARON LaFRANIERE

SHANGHAI — The Hollywoodstudio DreamWorks Animationrecently announced a bold moveto crack China’s tightly protectedfilm industry: a $330 million dealto create a Shanghai animationstudio that might one day rivalthe California shops that turn outhits like “Kung Fu Panda” and“The Incredibles.”

What DreamWorks did notshowcase, however, was one ofits newest — and most important— Chinese partners: Jiang Mian-heng, the 61-year-old son of JiangZemin, the former CommunistParty leader and the most power-ful political kingmaker of China’slast two decades.

The younger Mr. Jiang’s coupshave included ventures withMicrosoft and Nokia and over-sight of a clutch of state-backedinvestment vehicles that havemajor interests in telecommuni-cations, semiconductors and con-struction projects.

That a dealmaker like Mr.Jiang would be included in an un-dertaking like that of Dream-Works is almost a given in to-day’s China. Analysts say this ishow the Communist Party sharesthe spoils, allowing the relativesof senior leaders to cash in on oneof the biggest economic booms inhistory.

As the scandal over Bo Xilaicontinues to reverberate, the au-thorities here are eager to paintMr. Bo, a fallen leader who wasone of 25 members of China’s rul-ing Politburo, as a rogue operator

who abused his power, even ashis family members accumulateda substantial fortune.

But evidence is mounting thatthe relatives of other current andformer senior officials have alsoamassed vast wealth, often play-ing central roles in businessesclosely entwined with the state,including those involved in fi-nance, energy, domestic security,telecommunications and enter-tainment. Many of these so-calledprincelings also serve as middle-men to a host of global companiesand wealthy tycoons eager to dobusiness in China.

“Whenever there is somethingprofitable that emerges in theeconomy, they’ll be at the front ofthe queue,” said Minxin Pei, anexpert on China’s leadership andprofessor of government atClaremont McKenna College inCalifornia. “They’ve gotten intoprivate equity, state-owned en-terprises, natural resources —you name it.”

For example, Wen Yunsong,the son of Prime Minister WenJiabao, heads a state-owned com-pany that boasts that it will soonbe Asia’s largest satellite commu-nications operator. President HuJintao’s son, Hu Haifeng, oncemanaged a state-controlled firmthat held a monopoly on securityscanners used in China’s air-ports, shipping ports and subwaystations. And in 2006, Feng Shao-dong, the son-in-law of Wu Bang-guo, the party’s second-ranking

China ‘Princelings’ UsingFamily Ties to Gain Riches

Leaders’ Relatives Take Key Business Posts— Spoils System Poses Risk to Party

Continued on Page A14

C M Y K Nxxx,2012-05-18,A,001,Bs-BK,E3

U(D54G1D)y+$!#!\!=!$

Residents of the isolated MosquitoCoast of Honduras have burned downgovernment buildings and are demand-ing that American drug agents leave thearea immediately. PAGE A5

INTERNATIONAL A4-14

Anger Rises After Drug SweepThe Senate voted to confirm two nomi-nees for the Federal Reserve Board ofGovernors, overcoming Republican ob-jections and bringing the seven-mem-ber board to full strength for the firsttime since 2006. PAGE B3

BUSINESS DAY B1-9

Senate Clears Fed Nominees

David Brooks PAGE A31

EDITORIAL, OP-ED A30-31

If the movies that win acclaim atFrance’s Cannes Film Festival have lit-tle impact on the box office, they remaininfluential, and for good reason. PAGE C1

WEEKEND C1-32

The True Stars at Cannes

Robert F. Kennedy Jr. said his es-tranged wife had “a lot of agony” in herlife. She had been suffering from alco-holism and depression. PAGE A25

NEW YORK A24-28

Mary Kennedy Is Mourned Wal-Mart suggested in a regulatory fil-ing that the scope of an internal investi-gation into bribery accusations had wid-ened beyond the huge retailer’s subsid-iary in Mexico. PAGE B1

Bribery Case May Widen

A month before his planned walk acrossNiagara Falls, Nik Wallenda, a descend-

ant of the FlyingWallendas familyof circus perform-ers, practices inthe town twice aday, across thestreet from a mini-mart, with dozensof onlookers and ahot dog stand near-by. PAGE A24

Already a Crowd Pleaser

Police tried frantically to save TrayvonMartin after he was shot by a neighbor-hood watch volunteer, documents re-leased in the case show. PAGE A16

Details Released in Killing

A jury began deliberating the fate of theformer presidential candidate John Ed-wards. His lawyer argued that he com-mitted a wrong, but did not commit acrime. PAGE A16

NATIONAL A16-22

Edwards Case in Jury’s Hands

VOL. CLXI . . No. 55,775 © 2012 The New York Times NEW YORK, FRIDAY, MAY 18, 2012

Late EditionToday, an abundance of sun, nice,high 73. Tonight, clear, cool onceagain, low 53. Tomorrow, plenty ofsunshine, pleasant, a bit warmer,high 79. Weather map, Page B16.

$2.50

Win or lose, JohnTortorella of theRangers conductspostgame newsconferences thatare short — onelasted 16 seconds— antagonistic andinvariably devoidof revealing re-sponses. PAGE B13

SPORTSFRIDAY B10-16

A Coach of Few Words

A RICH START Facebook sold 421million shares for $38 each, rais-ing $16 billion and valuing thecompany at $104 billion. PAGE B1

By SOMINI SENGUPTA

MENLO PARK, Calif. —Wealth is here if you know whereto find it.

Fabulous home theaters aretucked into the basements ofplain suburban houses. Bespokejeans that start at $1,200 can bedetected only by a tiny red logoon the button. The hand-paintedItalian bicycles that flash acrossSilicon Valley on Saturday morn-ings have become the new Ferra-ri — and only the cognoscenticould imagine that they costmore than $20,000.

Even at Facebook, ground zerofor the nouveau tech riche, peerpressure dictates that consump-tion be kept on the down low.

“The message here is, ‘Keepshipping product,’” said a Face-book executive who requestedanonymity while discussing in-ternal matters. “If someone buysa fancy car and posts a picture ofit, they get ridiculed and berat-ed.”

The company disclosed onThursday that on the eve of itsstock market debut it was invit-ing employees to a hackathon, or

Preferred Style:Don’t Flaunt ItIn Silicon Valley

Continued on Page B7

PHILADELPHIA — TheBarnes Foundation’s move fromsuburban Philadelphia to the cen-ter of the city caused art loverslots of worry.

Devotees of this great polyglotcollection, heavy withRenoir, Cézanne andMatisse, which theomnivore art shopperAlbert C. Barnesamassed between 1912and his death in 1951,

were appalled by the idea.Barnes spent years obsessivelyarranging his installation cheek-by-jowl in the mansion in LowerMerion, Pa., that he built for thepurpose and opened in 1925, andhe stipulated that, after he died, itshould remain exactly as it was.

In 2002 the foundation’s board— constrained by limits on at-

tendance and public hours im-posed by zoning restrictions —announced plans to relocate.Many people, including a groupthat sued to stop the move, weresure that it could only desecratethis singular institution.

Others, myself included, didnot object to the move per se, butfelt that faithfully reproducingthe old Barnes in the new space,as promised by the trustees, wasa terrible idea. To us it seemedtime to at least loosen upBarnes’s straitjacketed displays,wonderful as they often were.And why go to the trouble of mov-ing the collection to a more acces-sible location when the gallerieswere not going to be any bigger?

And yet the new Barnes provesall of us wrong. Against all odds,

A Museum, Reborn, RemainsTrue to Its Old Self, Only Better

FRED R. CONRAD/THE NEW YORK TIMES

The new Barnes Foundation, in a new shell in Philadelphia.

Continued on Page A18

ROBERTASMITH

ARTREVIEW

DONNA SUMMER, 1948-2012

By JON PARELES

Donna Summer, the multi-million-selling singer and song-writer whose hits captured boththe giddy hedonism of the 1970sdisco era and the feisty femalesolidarity of the early 1980s, diedon Thursday at her home in Na-ples, Fla. She was 63.

The cause was cancer, her pub-licist, Brian Edwards, said.

With her doe eyes, cascade ofhair and sinuous dance moves,Ms. Summer became the queenof disco — the music’s glamorouspublic face — as well as an idolwith a substantial gay following.Her voice, airy and ethereal orbrightly assertive, sailed overdance floors and leapt from ra-dios from the mid-’70s well intothe ’80s.

She riffled through styles as di-verse as funk, electronica, rockand torch song as she piled up 14Top 10 singles in the UnitedStates, among them “Love toLove You Baby,” “Bad Girls,”“Hot Stuff,” “Last Dance” and

“She Works Hard for the Money.”In the late ’70s she had three dou-ble albums in a row that reachedNo. 1, and each sold more than amillion copies.

Her combination of a church-rooted voice and up-to-the-minute dance beats was a tem-plate for 1970s disco, and, withher producers Giorgio Moroderand Pete Bellotte, she pioneeredelectronic dance music with thesynthesizer pulse of “I FeelLove” in 1977, a sound that per-vades 21st-century pop. Her ownrecordings have been sampledby, among others, Beyoncé, thePet Shop Boys, Justice and Nas.

Ms. Summer won GrammyAwards for dance music, R&B,rock and gospel. Her recordedcatalog spans the orgasmicmoans of her first hit, “Love to

The Queen of Disco, Who Transcended the Era

MICHAEL OCHS ARCHIVES/GETTY IMAGES

Donna Summer in 1978.

Continued on Page A23

DADO RUVIC/REUTERS

Mejra Dzogaz, who lost her husband, three sons and a grandson to the 1995 Srebrenica massacre, in Potocari, Bosnia. In TheHague, it was Day 2 of the genocide trial of Ratko Mladic, who led the military unit that carried out the massacre. Page A12.

Remembering a Horror

By JIM RUTENBERGand JEFF ZELENY

Joe Ricketts, an up-by-the-bootstraps billionaire whose var-ied holdings include a name-brand brokerage firm in Omaha,a baseball team in Chicago, herdsof bison in Wyoming and a start-up news Web site in New York,wanted to be a player in the 2012election. On Thursday he was,though not in the way he had in-tended.

Word that Mr. Ricketts hadconsidered bankrolling a $10 mil-lion advertising campaign linkingPresident Obama to the incendi-ary race-infused statements ofhis former pastor, the Rev. Jere-miah A. Wright Jr., broughtwaves of denunciation from MittRomney, the Obama campaignand much of the rest of the politi-cal world.

Highlighting the perils of mix-ing partisan politics and corpo-rate citizenship, the reverbera-

Magnate StepsInto 2012 Fray On Wild Pitch

Continued on Page A20

By C. J. CHIVERS

FORT CAMPBELL, Ky. — Tothose unfamiliar with a battle-field’s bleak routine, Col. MichaelD. Wirt’s database could be readlike a catalog of horrors. In it,more than 500 American soldiersare subjected to characteristicforms of violence of the Afghanwar.

Faces are smacked with shrap-nel, legs are blasted away nearknees, bullets pass throughyoung men’s abdomens. Vehiclesroll over, crushing bones. Ear-drums rupture. Digits are sev-ered.

Dozens of soldiers die. Hun-dreds more begin journeys home,sometimes to treatment that willlast the rest of their lives.

Each was listed in a small butmeticulous computer entry byColonel Wirt, a doctor intent ondocumenting how soldiers werewounded or sickened, how theywere treated and how they fared.For those seeking to understandwar and how best to survive it,the doctor on his own initiativecreated an evidence-based tooland a possible model.

His database is one part of avast store of information re-corded about the experiences ofAmerican combatants. But thereare concerns that the potentiallessons from such data could belost, because no one has yetbrought the information togetherand made it fully cohere.

Colonel Wirt was a brigade sur-geon from the 101st Airborne Di-vision during the American-ledeffort in 2010 and 2011 to dislodgethe Taliban from their ruralstronghold along the ArghandabRiver. His database was part offi-cial record, part personal re-search project.

His commander required himto keep tabs on ailing and wound-ed soldiers, and to inform him oftheir prognosis and whereaboutsin the medical system.

To this, Colonel Wirt added lay-ers of information. He document-ed which weapons caused whichwounds. He tried to record in-creased or decreased risk factors— whether the victim was wear-ing larger or smaller body armor,whether a bomb-sniffing dog waspresent, when a tourniquet wasapplied.

He recorded which accidents

and diseases took which soldiersoff duty, and for how long. Hemapped where on a human bodybullets most often struck.

A year after he returned to thestates, Colonel Wirt and his data-base point to the promise and ob-stacles related to studying morethan a decade of American war.

The amassed information oncombatants over 10 yearsamounts to the most detailed

Cataloging Wounds of War to Help Heal Them

Continued on Page A3

By DAVID BARBOZA and SHARON LaFRANIERE

SHANGHAI — The Hollywoodstudio DreamWorks Animationrecently announced a bold moveto crack China’s tightly protectedfilm industry: a $330 million dealto create a Shanghai animationstudio that might one day rivalthe California shops that turn outhits like “Kung Fu Panda” and“The Incredibles.”

What DreamWorks did notshowcase, however, was one ofits newest — and most important— Chinese partners: Jiang Mian-heng, the 61-year-old son of JiangZemin, the former CommunistParty leader and the most power-ful political kingmaker of China’slast two decades.

The younger Mr. Jiang’s coupshave included ventures withMicrosoft and Nokia and over-sight of a clutch of state-backedinvestment vehicles that havemajor interests in telecommuni-cations, semiconductors and con-struction projects.

That a dealmaker like Mr.Jiang would be included in an un-dertaking like that of Dream-Works is almost a given in to-day’s China. Analysts say this ishow the Communist Party sharesthe spoils, allowing the relativesof senior leaders to cash in on oneof the biggest economic booms inhistory.

As the scandal over Bo Xilaicontinues to reverberate, the au-thorities here are eager to paintMr. Bo, a fallen leader who wasone of 25 members of China’s rul-ing Politburo, as a rogue operator

who abused his power, even ashis family members accumulateda substantial fortune.

But evidence is mounting thatthe relatives of other current andformer senior officials have alsoamassed vast wealth, often play-ing central roles in businessesclosely entwined with the state,including those involved in fi-nance, energy, domestic security,telecommunications and enter-tainment. Many of these so-calledprincelings also serve as middle-men to a host of global companiesand wealthy tycoons eager to dobusiness in China.

“Whenever there is somethingprofitable that emerges in theeconomy, they’ll be at the front ofthe queue,” said Minxin Pei, anexpert on China’s leadership andprofessor of government atClaremont McKenna College inCalifornia. “They’ve gotten intoprivate equity, state-owned en-terprises, natural resources —you name it.”

For example, Wen Yunsong,the son of Prime Minister WenJiabao, heads a state-owned com-pany that boasts that it will soonbe Asia’s largest satellite commu-nications operator. President HuJintao’s son, Hu Haifeng, oncemanaged a state-controlled firmthat held a monopoly on securityscanners used in China’s air-ports, shipping ports and subwaystations. And in 2006, Feng Shao-dong, the son-in-law of Wu Bang-guo, the party’s second-ranking

China ‘Princelings’ UsingFamily Ties to Gain Riches

Leaders’ Relatives Take Key Business Posts— Spoils System Poses Risk to Party

Continued on Page A14

C M Y K Nxxx,2012-05-18,A,001,Bs-BK,E3

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

senior leaders may be entirely legal. But it is all but impossible to distinguish between le-gitimate and ill-gotten gains because there is no public disclosure of the wealth of officials and their relatives. Conflict-of-interest laws are weak or nonexistent. And the business dealings of the political elite are heavily censored in the state-controlled news media.

The spoils system, for all the efforts to keep a lid on it, poses a fundamental challenge to the legitimacy of the Communist Party. As the state’s business has become increasingly inter-twined with a class of families sometimes called the Red Nobility, analysts say the potential ex-ists for a backlash against an increasingly entrenched elite. They also point to the risk that national policies may be sub-verted by leaders and former leaders, many of whom exert influence long after their retire-ment, acting to protect their own interests.

Chinese officials and their relatives rarely discuss such a delicate issue publicly. The New York Times made repeated attempts to reach public officials and their relatives for this article, often through their companies. None of those reached agreed to comment on the record.

DreamWorks and Microsoft declined to comment about their relationship with Mr. Ji-ang.

A secret United States State Department cable from 2009, released two years ago by the WikiLeaks project, cited reports that China’s ruling elite had carved up the country’s eco-nomic pie. At the same time, many companies openly boast that their ties to the political elite give them a competitive advantage in China’s highly regulated marketplace.

A Chinese sportswear company called Xidelong, for example, proudly informed some potential investors that one of its shareholders was the son of Wen Jiabao, according to one of the investors. (A private equity firm, New Ho-rizon, that the son, Wen Yunsong helped found invested in the company in 2009, according to Xidelong’s Web site.) “There are so many ways to partner with the families of those in power,” said one finance executive who has worked with the relatives of senior leaders. “Just make them part of your deal; it’s perfectly legal.”

Worried about the appearance of impropri-ety and growing public disgust with official cor-ruption, the Communist Party has repeatedly revised its ethics codes and tightened financial disclosure rules. In its latest iteration, the party in 2010 required all officials to report the jobs, whereabouts and investments of their spouses and children, as well as their own incomes. But the disclosure reports remain secret; proposals to make them public have been shelved repeat-edly by the party-controlled legislature.

The party is unlikely to move more aggres-sively because families of high-ranking past and current officials are now deeply embedded

in the economic fabric of the nation. Over the past two decades, business and politics have become so tightly intertwined, they say, that the Com-munist Party has effectively insti-tutionalized an entire ecosystem of crony capitalism. “They don’t want to bring this into the open,” said

Roderick MacFarquhar, a China specialist at Harvard University. “It would be a tsunami.”

Critics charge that powerful vested inter-ests are now strong enough to block reforms that could benefit the larger populace. Changes in banking and financial services, for instance, could affect the interests of the family of Zhu Rongji, China’s prime minister from 1998 to 2003 and one of the architects of China’s economic system. His son, Levin Zhu, joined China Inter-national Capital Corporation, one of the coun-try’s biggest investment banks, in 1998 and has served as its chief executive for the past decade.

efforts to open the power sector to compe-tition, for example, could affect the interests of relatives of Li Peng, a former prime minister. Li Xiaolin, his daughter, is the chairwoman and chief executive of China Power International, the flagship of one of the big five power gen-erating companies in China. Her brother, Li Xiaopeng, was formerly the head of another big power company and is now a public official.

“This is one of the most difficult challenges China faces,” said Mr. Pei, an authority on Chi-na’s leadership. “Whenever they want to imple-ment reform, their children might say, ‘Dad, what about my business?’ ”

There are also growing concerns that a cul-ture of nepotism and privilege nurtured at the top of the system has flowed downward, perme-

A14 N INTERNATIONALTHE NEW YORK TIMES FRIDAY, MAY 18, 2012

want to implement reform, theirchildren might say, ‘Dad, whatabout my business?’”

There are also growing con-cerns that a culture of nepotismand privilege nurtured at the topof the system has flowed down-ward, permeating bureaucraciesat every level of government inChina. “After a while you realize,wow, there are actually a lot ofprincelings out there,” said VictorShih, a China scholar at North-western University near Chicago,using the label commonlyslapped on descendants of partyleaders. “You’ve got the childrenof current officials, the children of

previous officials, the children oflocal officials, central officials,military officers, police offi-cials.We’re talking about hun-dreds of thousands of people outthere — all trying to use theirconnections to make money.”

To shore up confidence in thegovernment’s ability to tackle theproblem, high-ranking leadersregularly inveigh against greedyofficials caught with their hand inthe till. In 2008, for instance, a for-mer Shanghai Party secretary,Chen Liangyu, was sentenced to18 years in prison for bribery andabuse of power. One of his crimeswas pressing businessmen tofunnel benefits to his close rela-tives, including a land deal thatnetted his brother, Chen Liang-jun, a $20 million profit.

But exposés in the foreignpress — like the report in 2010

that Zeng Wei, the son of China’sformer vice president Zeng Qing-hong, bought a $32 million man-sion in Sydney, Australia — areignored by the Chinese-languagenews media and blocked by In-ternet censors.

Allegations of bribery and cor-ruption against the nation’s topleaders typically follow — ratherthan precede — a fall from politi-cal grace. Mr. Bo’s downfall thisspring, for instance, came afterhis former police chief in Chong-qing told American diplomatsthat Mr. Bo’s wife, Gu Kailai, hadordered the murder of Neil Hey-wood, a British businessman, in adispute over the family’s busi-ness interests.

Evidence has surfaced of atleast $160 million in assets heldby close relatives of Bo Xilai, andthe authorities are investigatingwhether other assets held by thefamily may have been secretlyand illegally moved offshore.

Wen Jiabao, the prime min-ister, responded by demanding amore forceful crackdown on cor-ruption. Without naming Mr. Boby name, People’s Daily, the offi-cial Communist Party newspa-per, denounced fortune seekerswho stain the party’s purity bysmuggling ill-gotten gains out ofthe country.

Some scholars argue that theparty is now hostage to its ownunholy alliances. Cheng Li, an ex-pert on Chinese politics with theBrookings Institution in Wash-ington, said it would be difficultfor the Chinese government topush through major political re-forms aimed at extricating pow-erful political families from busi-ness without giving immunity tothose now in power.

And with no independent judi-ciary in China, he said, partyleaders would essentially becharged with investigating them-

official, helped Merrill Lynch wina deal to arrange the $22 billionpublic listing of the giant state-run bank I.C.B.C., in what be-came the world’s largest initialpublic stock offering.

Much of the income earned byfamilies of senior leaders may beentirely legal. But it is all but im-possible to distinguish betweenlegitimate and ill-gotten gains be-cause there is no public disclo-sure of the wealth of officials andtheir relatives. Conflict-of-inter-est laws are weak or nonexistent.And the business dealings of thepolitical elite are heavily cen-sored in the state-controllednews media.

The spoils system, for all theefforts to keep a lid on it, poses afundamental challenge to the le-gitimacy of the Communist Party.As the state’s business has be-come increasingly intertwinedwith a class of families some-times called the Red Nobility, an-alysts say the potential exists fora backlash against an increas-ingly entrenched elite. They alsopoint to the risk that national pol-icies may be subverted by lead-ers and former leaders, many ofwhom exert influence long aftertheir retirement, acting to protecttheir own interests.

Chinese officials and their rela-tives rarely discuss such a del-icate issue publicly. The NewYork Times made repeated at-tempts to reach public officialsand their relatives for this article,often through their companies.None of those reached agreed tocomment on the record.

DreamWorks and Microsoftdeclined to comment about theirrelationship with Mr. Jiang.

A secret United States StateDepartment cable from 2009, re-leased two years ago by the Wiki-Leaks project, cited reports thatChina’s ruling elite had carved upthe country’s economic pie. Atthe same time, many companiesopenly boast that their ties to thepolitical elite give them a compet-itive advantage in China’s highlyregulated marketplace.

A Chinese sportswear compa-ny called Xidelong, for example,proudly informed some potentialinvestors that one of its share-holders was the son of Wen Jia-bao, according to one of the in-vestors. (A private equity firmMr. Wen helped found, New Hori-zon, invested in the company in2009, according to Xidelong’sWeb site.) “There are so manyways to partner with the familiesof those in power,” said one fi-nance executive who has workedwith the relatives of senior lead-ers. “Just make them part of yourdeal; it’s perfectly legal.”

Worried about the appearanceof impropriety and growing pub-lic disgust with official corrup-tion, the Communist Party hasrepeatedly revised its ethicscodes and tightened financial dis-closure rules. In its latest itera-tion, the party in 2010 required allofficials to report the jobs, where-abouts and investments of theirspouses and children, as well astheir own incomes. But the dis-

closure reports remain secret;proposals to make them publichave been shelved repeatedly bythe party-controlled legislature.

The party is unlikely to movemore aggressively because fam-ilies of high-ranking past and cur-rent officials are now deeply em-bedded in the economic fabric ofthe nation. Over the past two dec-ades, business and politics havebecome so tightly intertwined,they say, that the CommunistParty has effectively institution-alized an entire ecosystem of cro-ny capitalism. “They don’t wantto bring this into the open,” saidRoderick MacFarquhar, a Chinaspecialist at Harvard University.“It would be a tsunami.”

Critics charge that powerfulvested interests are now strongenough to block reforms thatcould benefit the larger populace.Changes in banking and financialservices, for instance, could af-fect the interests of the family ofZhu Rongji, China’s prime min-ister from 1998 to 2003 and one ofthe architects of China’s econom-ic system. His son, Levin Zhu,joined China International Cap-ital Corporation, one of the coun-try’s biggest investment banks,in 1998 and has served as its chiefexecutive for the past decade.

Efforts to open the power sec-tor to competition, for example,could affect the interests of rela-tives of Li Peng, a former primeminister. Li Xiaolin, his daughter,is the chairwoman and chief ex-ecutive of China Power Interna-tional, the flagship of one of thebig five power generating compa-nies in China. Her brother, LiXiaopeng, was formerly the headof another big power companyand is now a public official.

“This is one of the most diffi-cult challenges China faces,” saidMr. Pei, an authority on China’sleadership. “Whenever they

selves. “The party has said an-ticorruption efforts are a life-and-death issue,” Mr. Li said. “But ifthey want to clean house, it maybe fatal.”

Chinese tycoons have alsobeen quietly welcomed into thefamilies of senior leaders, oftenthrough secret partnerships inwhich the sons, daughters,spouses and close relatives act asmiddlemen or co-investors in realestate projects or other deals thatneed government approval orbacking, according to investorswho have been involved in suchtransactions.

Moreover, China’s leading po-litical families, often through in-termediaries, hold secret sharesin dozens of companies, includingmany that are publicly listed inHong Kong, Shanghai and else-where, according to interviewswith bankers and investment ad-visers. Lately, the progeny of thepolitical elite have retooled thespoils system for a new era, mov-ing into high-finance ventureslike private equity funds, wherethe potential returns dwarf thebenefits from serving as a mid-dleman to government contractsor holding an executive post at astate monopoly.

Jeffrey Zeng, the son of the for-mer Politburo member Zeng Pei-yan, is a managing partner atKaixin Investments, a venture-capital firm set up with two state-owned entities, China Develop-ment Bank and Citic Capital. LiuLefei, the son of another Politbu-ro member, Liu Yunshan, helpsoperate the $4.8 billion Citic Pri-vate Equity Fund, one of the big-gest state-managed funds. Lastyear, Alvin Jiang, the grandson offormer president Jiang Zemin,helped establish Boyu Capital, aprivate equity firm that is on itsway to raising at least $1 billion.

Most recently, with the Com-

munist Party promising to over-haul the nation’s media and cul-tural industries, the relatives ofChina’s political elite are at thehead of the crowd scrambling forfootholds in a new frontier.

The February announcementof the deal between DreamWorksand three Chinese partners, in-cluding Shanghai Alliance Invest-ment, was timed to coincide withthe high-profile visit to the Unit-ed States of Xi Jinping, China’svice president and presumptivenext president. The news releasedid not mention that Shanghai Al-liance is partly controlled by Mr.Jiang, the son of a former presi-dent, Jiang Zemin. A person whoanswered the telephone at theShanghai Alliance office here de-clined to comment.

Zeng Qinghuai, the brother ofZeng Qinghong, China’s formervice president, is also in the filmbusiness. He served as a consult-ant for the patriotic epic “Be-ginning of the Great Revival.”The film exemplified the hand-in-glove relationship between busi-ness and politics. It was shownon nearly 90,000 movie screensacross the country. Governmentoffices and schools were orderedto buy tickets in bulk. The mediawas banned from criticizing it. Itbecame one of last year’s top-grossing films.

Scholars describe the film in-dustry as the new playground forprincelings. Zhang Xiaojin, direc-tor of the Center of Political De-velopment at Tsinghua Universi-ty, said, “There are cases wherepropaganda ministry officialsspecifically ask their children tomake films which they then ap-prove.”

Zhao Xiao, an economist at theUniversity of Science and Tech-nology in Beijing, said, “They areeverywhere, as long as the in-dustry is profitable.”

Fears of a backlashagainst a culture of‘Red Nobility.’

In Economic Rise, China’s ‘Princelings’ Learn to Cash In on Their Family Ties

Family members of many high-ranking officials have profited enormously from China's economic boom, often through businesses tied to the state. Below, some top Party leaders, and important relatives.

Wen YunsongSon

Mr. Wen’s son, also known as Winston Wen, is the chairman of thestate-owned ChinaSatellite CommunicationsCorporation and the co-founder of New Horizon, a big private equity firm.

Zhang BeiliWife

According to a U.S. State Department cable, she controls part of the precious gems market.

Hu HaifengSon

Served as party secretary to Tsinghua Holdings, an umbrella company, from late 2008 to 2009. Before that, he was president of a state-controlled firm that made scanners to detect contraband or dangerous materials.

Jiang MianhengSon

Partly controls Shanghai Alliance Investments, a state-backed company that invested in a Microsoft joint venture and in China Netcom, as well as a recent DreamWorks deal.

Alvin JiangGrandson

Announced plans to raise $1 billion for his investment fund, Boyu Capital, which was formed with a former executive from TPG, the American private equity giant.

Li XiaolinDaughter

Chairwoman and chief executive of China Power International, the flagship of one of China’s big five power generating companies.

Li XiaopengSon

Former chairman of a state- controlled power company until 2008; now vice governor of Shanxi Province.

Feng ShaodongSon-in-law

Also known as Wilson Feng, he is the general manager of a nuclear power investment fund established by the state-owned Guangdong Nuclear Power Holding Corporation.

THE NEW YORK TIMES

Power and Profit

WEN JIABAOPrime minister

HU JINTAOChina's president

LI PENGFormer prime minister

WU BANGGUOChina's top legislator

JIANG ZEMINFormer president

From Page A1

By MICHAEL WINES

LINYI, China — The centralgovernment says that the activistChen Guangcheng is a free man,and has promised him an investi-gation of the harrowing abuseshe suffered at the hands ofguards here. Mr. Chen’s desper-ate escape last month from per-secution to American protectionhas embarrassed China’s leadersand cast new shadows on theircommitment to the rule of law.

But a visit to this municipalityin eastern China, where Mr. Chenand his family most recentlyspent 20 months as prisoners intheir own home, offers no hint ofa change in the way China dealswith its dissidents.

Journalists who sought on Sun-day to talk to residents a few hun-dred yards from Dongshigu, thevillage in Linyi where Mr. Chenwas held captive, were quicklyescorted out by thugs in fourcars, and later were accosted in aburst of arm-wrenching andname-calling.

Members of the same gang stillkeep Mr. Chen’s mother undersiege here. Mr. Chen’s nephewfaces a charge of attempted mur-der after he slashed a knife atplainclothes officers who invadedhis home and beat him. Lawyersseeking to defend the nephewhave been ordered to drop thecase or face retribution.

There is no evidence that thegovernment in Beijing orderedthis harassment, all of which is il-legal under Chinese law. Butthere is also no any indicationthat Beijing wants it to stop.

In fact, both rights activistsand legal experts say, the systemfor dealing with dissidents andother troublemakers is geared to-ward allowing local leaders to ig-nore the law, with Beijing’s some-times silent assent.

The central government may

even reward local leaders for do-ing so. The reason is that theirCommunist Party careers de-pend on meeting a series of per-formance goals — from high eco-nomic growth to low levels ofpublic unrest — whose impor-tance far outweigh any gold starsawarded for following the law.

That system gives leaders anincentive to silence troublemak-ers by any means in order to winhigh marks for maintaining pub-lic stability, one of the most im-portance performance metrics. Itcan uncork gushers of money foradded security measures to keepcontrol of a high-profile activistlike Mr. Chen.

And it can pay off for the localleaders who do the job well. Theman Mr. Chen has blamed mostfor his detention and imprison-ment is Li Qun, who was mayorof Linyi from 2003 to 2007. Just afew years before that, Mr. Li wasstudying public administration atthe University of New Haven andan intern to the New Haven may-or, John DeStefano Jr.

Mr. Li has since been promotedto party secretary of Shandong’sbiggest port, Qingdao, and he sitson the province’s CommunistParty standing committee, itshighest ruling body.

Only when local measuresblow up into national or globalembarrassments, as they have inMr. Chen’s case, is the centralgovernment obliged to step inand order face-saving measureslike investigations. In countlessother instances, the experts say,Beijing quietly tolerates local offi-cials’ lawlessness, and they do sofor a simple reason: with rare ex-ceptions, the system is exceed-ingly efficient at stifling unrest.

Jerome Cohen, a law professorat New York University and anadviser to Mr. Chen, said he wastold by a prominent Chinesecriminal lawyer that cases likeMr. Chen’s were not unusual.“They’re only unusual becauseyou know about them,” Mr. Co-

hen said. “I can tell you that thereare thousands of cases like this.”

To those who study the system,its success makes it unlikely thatparty leaders will use the embar-rassment of the Chen episode topush for changes that couldthemselves prove destabilizing.

“It would have implications notjust in one city or one county, butfor the entire country,” Fu Hual-ing, a law professor at HongKong University, said in an in-terview. “This is how they governthe population. If you punish thelocal government, if you dismissthe officials, then you have to tell

all the other local officials thatthere’s a different way of doingthings now. And that would be avery fundamental change.”

A serious inquiry also wouldsend a signal that when enoughpublicity and pressure is broughtto bear, the Communist Party canbe forced to change.

“The main problem with Bei-jing is that very often, they con-done injustices even though theyknow that the local authoritiesare in the wrong,” said NicholasBequelin of Human Rights Watchin Hong Kong. “But many of theproblems that come up in thesecases are not isolated — they’reendemic. And Beijing fears thatbacking down on one case wouldopen the floodgates.”

Mr. Chen’s case, one of the fewto get prolonged public scrutiny,offers some insights into the in-centives that make repression

the tool of choice to deal with dis-sidents and troublemakers.

A self-taught lawyer who isblind, Mr. Chen crusaded for so-cial justice in his native Shan-dong Province, and in the pro-cess imperiled party officials’record not only on keeping order,but also on another importantmeasure: enforcing the one-childpopulation-control policy.

In August 2005, after he begana deftly publicized campaign tohelp citizens sue the local govern-ment over forced late-term abor-tions and sterilizations, the re-action was swift: a mob sur-rounded Mr. Chen’s village home,trapping the family inside forweeks. Foreshadowing theevents of this spring, Mr. Chenand a nephew eventually escapedto Beijing, only to be seized thereand returned home by police offi-cers sent from Shandong.

Neither action by the local au-thorities was legal. “They usedthe justification of the one-childpolicy and stability mainte-nance,” said Pu Zhiqiang, aprominent human rights lawyer.

After the detention generatedinternational headlines, Mr. Co-hen said, the public security min-ister sent emissaries to Shan-dong to discuss the case. Later, in2006, Mr. Chen was convicted andimprisoned on what experts saidwere trumped-up charges, andhis detention gained a legal basis.

But when he was released fromprison in September 2010, Mr.Chen again found himself and hisfamily sealed inside their villagehome, this time surrounded by acordon of fences and securityequipment and a contingent ofguards around the clock.

For the layers of governmentoverseeing Dongshigu, Mr.Chen’s destitute, remote village,detention has become a lucrativeindustry. Mr. Chen has claimedthat his captors told him it costabout $9.5 million annually tokeep him under house arrest.

The target of that smotheringsecurity is now in a Beijing hospi-tal, preparing to move with hiswife and daughter to the UnitedStates to study law. But the costlycrackdown continues unabated.

Outside Dongshigu, policevans dot the highway, their lightsflashing, and carloads of plain-clothes guards roam side roads,their license plates sometimescovered in camouflage cloth.

On Sunday, when journalistssought to visit Mr. Chen’s homein Dongshigu, about 33 milesfrom Linyi, they were quicklyand roughly escorted away by se-curity guards in plain clothes.Later, in Yinan, the county seat,one man attacked a photogra-pher who was recording a report-er’s attempt to question him.

“Get out of China,” the manyelled at a Chinese news assist-ant. “You’re not Chinese. You’rea traitor.”

Concern About Stability Gives Chinese Officials Leeway to Crush Dissent

ED JONES/AGENCE FRANCE-PRESSE — GETTY IMAGES

Security guards barred reporters from seeing Chen Guangcheng at a Beijing hospital on May 4.

A system geared toallowing local leadersto ignore the law.

Shi Da contributed research fromDongshigu, China, and Edy Yinfrom Beijing.

Nxxx,2012-05-18,A,014,Bs-BW,E1

ating bureaucracies at every level of govern-ment in China. “After a while you realize, wow, there are actually a lot of princelings out there,” said Victor Shih, a China scholar at Northwest-ern University near Chicago, using the label commonly slapped on descendants of party leaders. “You’ve got the children of current of-ficials, the children of previous officials, the children of local officials, central officials, mili-tary officers, police officials.We’re talking about hundreds of thousands of people out there — all trying to use their connections to make money.”

To shore up confidence in the government’s ability to tackle the problem, high-ranking lead-ers regularly inveigh against greedy officials caught with their hand in the till. In 2008, for instance, a former Shanghai Party secretary, Chen Liangyu, was sentenced to 18 years in prison for bribery and abuse of power. One of his crimes was pressing businessmen to funnel benefits to his close relatives, including a land deal that netted his brother, Chen Liangjun, a $20 million profit.

But exposés in the foreign press — like the report in 2010 that Zeng Wei, the son of China’s former vice president Zeng Qinghong, bought a $32 million mansion in Sydney, Australia — are ignored by the Chinese-language news media and blocked by Internet censors.

Allegations of bribery and corruption against the nation’s top leaders typically fol-low — rather than precede — a fall from po-litical grace. Mr. Bo’s downfall this spring, for instance, came after his former police chief in Chongqing told American diplomats that Mr. Bo’s wife, Gu Kailai, had ordered the murder of Neil Heywood, a British businessman, in a dis-pute over the family’s business interests.

evidence has surfaced of at least $160 mil-lion in assets held by close relatives of Bo Xilai, and the authorities are investigating whether other assets held by the family may have been secretly and illegally moved offshore.

Wen Jiabao, the prime minister, responded by demanding a more forceful crackdown on corruption. Without naming Mr. Bo by name, People’s Daily, the official Communist Party newspaper, denounced fortune seekers who stain the party’s purity by smuggling ill-gotten gains out of the country.

Some scholars argue that the party is now hostage to its own unholy alliances. Cheng Li,

an expert on Chinese politics with the Brook-ings Institution in Washington, said it would be difficult for the Chinese government to push through major political reforms aimed at extri-cating powerful political families from business without giving immunity to those now in power.

And with no independent judiciary in Chi-na, he said, party leaders would essentially be charged with investigating themselves. “The party has said anticorruption efforts are a life-and-death issue,” Mr. Li said. “But if they want to clean house, it may be fatal.”

Chinese tycoons have also been quietly wel-comed into the families of senior leaders, often through secret partnerships in which the sons, daughters, spouses and close relatives act as middlemen or co-investors in real estate proj-ects or other deals that need government ap-proval or backing, according to investors who have been involved in such transactions.

Moreover, China’s leading political fami-lies, often through intermediaries, hold se-cret shares in dozens of companies, including many that are publicly listed in Hong Kong, Shanghai and elsewhere, according to inter-views with bankers and investment advisers. Lately, the progeny of the political elite have retooled the spoils system for a new era, mov-ing into high-finance ventures like private eq-uity funds, where the potential returns dwarf the benefits from serving as a middleman to government contracts or holding an executive post at a state monopoly.

Jeffrey Zeng, the son of the former Polit-buro member Zeng Peiyan, is a managing part-ner at Kaixin Investments, a venture-capital firm set up with two state-owned entities, China Development Bank and Citic Capital. Liu Lefei, the son of another Politburo member, Liu Yun-shan, helps operate the $4.8 billion Citic Private equity Fund, one of the biggest state-managed funds. Last year, Alvin Jiang, the grandson of former president Jiang Zemin, the former Com-munist Party leader and president, helped es-tablish Boyu Capital, a private equity firm that is on its way to raising at least $1 billion.

Most recently, with the Communist Party promising to overhaul the nation’s media and cultural industries, the relatives of China’s po-litical elite are at the head of the crowd scram-bling for footholds in a new frontier.

The February announcement of the deal

between DreamWorks and three Chinese part-ners, including Shanghai Alliance Investment, was timed to coincide with the high-profile visit to the United States of Xi Jinping, China’s vice president and presumptive next president. The news release did not mention that Shanghai Al-liance is partly controlled by Jiang Zemin’s son Jiang Mianheng. A person who answered the telephone at the Shanghai Alliance office here declined to comment.

Zeng Qinghuai, the brother of Zeng Qing-hong, China’s former vice president, is also in the film business. He served as a consultant for the patriotic epic “Beginning of the Great Reviv-al.” The film exemplified the hand-in-glove rela-tionship between business and politics. It was

shown on nearly 90,000 movie screens across the country. Government offices and schools were ordered to buy tickets in bulk. The media was banned from criticizing it. It became one of last year’s top-grossing films.

Scholars describe the film industry as the new playground for princelings. Zhang Xiaojin, director of the Center of Political Development at Tsinghua University, said, “There are cases where propaganda department officials spe-cifically ask their children to make films which they then approve.”

Zhao Xiao, an economist at the University of Science and Technology in Beijing, said, “They are everywhere, as long as the industry is prof-itable.” n